Wage and income subsidies for recipients of public and unemployment assistance
Wolfram Kempe, Hilmar Schneider
Wirtschaft im Wandel,
No. 16,
2001
Abstract
In dieser Arbeit, die auf einem Kapitel eines Gutachtens für das Bundesministerium der Finanzen zu den Anreizwirkungen der Sozialhilfe beruht, werden drei Kombilohnstrategien mit einer engen Zielgruppenbindung hinsichtlich ihrer Effekte bezüglich Erwerbsbereitschaft und fiskalischen Folgen für Ost- und Westdeutschland untersucht. Die Arbeitsangebotsentscheidung wird dabei unter Berücksichtigung des Haushaltskontextes im Rahmen eines mikroökonometrischen Conditional-Logit-Modells erfasst. Die Bereitschaft zur Aufnahme einer Erwerbsarbeit steigt tatsächlich, unterscheidet sich je nach Reformkonzept, Region, Geschlecht und Haushaltskontext aber beträchtlich. Die enge Zielgruppenbeschränkung auf Sozialtransferbezieher hat zur Folge, dass bei Erwerbsaufnahme trotz Subvention ein Teil der Transferzahlungen durch eigenes Einkommen ersetzt wird und die gesamtfiskalische Belastung des Staates damit zurückgeht.
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Public Research Institutions in East Germany: a Promising Base for Economic Upturn?
Gerhard Heimpold, Martin T. W. Rosenfeld
Wirtschaft im Wandel,
No. 15,
2001
Abstract
In the 1990s a lot was done to strengthen public research efforts in East Germany. The main indicators relating to public research reflect an ambivalent picture. Investment by universities and public research institutions outside the universities reached a higher level than in West Germany. However, there remains an East-West gap with respect to the capital stock. The per capita stock of R&D staff in the university sector reached almost the level in the old Länder. With respect to the university R&D in engineering sciences, among those fields of university research which are particularly business-related, per capita stock of staff as well as per capita investment in the Eastern German Länder are above the West German level. In university natural science the East-West pattern of the R&D input factors mentioned is reversed. The receipts of the universities acquired from research contracts, which may be used as an indicator to assess the quality of public research, reveal shortcomings. These shortcomings, though these have been partly caused by the transitional situation in East Germany`s universities, where new institutions were built up only gradually. The R&D institutions outside the universities are obviously better equipped than such institutions in West Germany.
The visible advantages offered by public sector research institutions in East Germany might be used much more intensively to foster the economic reconstruction in East Germany. In parallel with this, the remaining shortcomings of public R&D in East Germany should be eliminated. If reductions in universities´ capacities (due, for instance, to a declining number of persons who have a university entrance qualification) seem to be inevitable, the consequences of such restrictions should be carefully reconsidered.
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Rating Agency Actions and the Pricing of Debt and Equity of European Banks: What Can we Infer About Private Sector Monitoring of Bank Soundness?
Reint E. Gropp, A. J. Richards
Economic Notes,
No. 3,
2001
Abstract
The recent consultative papers by the Basel Committee on Banking Supervision has raised the possibility of an explicit role for external rating agencies in the assessment of the credit risk of banks’ assets, including interbank claims. Any judgement on the merits of this proposal calls for an assessment of the information contained in credit ratings and its relationship to other publicly available information on the financial health of banks and borrowers. We assess this issue via an event study of rating change announcements by leading international rating agencies, focusing on rating changes for European banks for which data on bond and equity prices are available. We find little evidence of announcement effects on bond prices, which may reflect the lack of liquidity in bond markets in Europe during much of our sample period. For equity prices, we find strong effects of ratings changes, although some of our results may suffer from contamination by contemporaneous news events. We also test for pre-announcement and post-announcement effects, but find little evidence of either. Overall, our results suggest that ratings agencies may perform a useful role in summarizing and obtaining non-public information on banks and that monitoring of banks’ risk through bond holders appears to be relatively limited in Europe. The relatively weak monitoring by bondholders casts some doubt on the effectiveness of a subordinated debt requirement as a supervisory tool in the European context, at least until bond markets are more developed.
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Germany: Cyclical Improvement not Until the End of the Year
Wirtschaft im Wandel,
No. 12,
2001
Abstract
During the second quarter of 2001 German overall production stagnated. Weak global development muddied the economic prospects of firms and prevented them from rising their output and their investment activities. In 2001 gross national product will only increase by 1%; the number of unemployed will be higher than expected. Nevertheless, we advise against an increase in public expenditure that aims at stimulating the economy. Anyhow, growing public deficits, caused by cyclical movements, should be accepted. In order to increase employment labour market reforms become more urgent.
In East Germany, currently even a decline in gross national product cannot be excluded. After the first period of restructuring, which has been accompanied by structural problems, cyclical movements become more important. In addition, economic stagnation burdens labour markets. Nonetheless trying to stimulate the East German economy by government spending programmes does not seem to be a viable strategy. From the cyclical point of view they are not very efficient and concerning structural problems they are no solution.
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The new discussion on public assistance should finally trigger top-to-bottom reform! - A commentary
Martin T. W. Rosenfeld
Wirtschaft im Wandel,
No. 11,
2001
Abstract
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Municipal labor market policy - Marshalling yard or escape from public assistance dependency?
Hilmar Schneider
Wirtschaft im Wandel,
No. 11,
2001
Abstract
Due to an increasing fiscal burden by welfare payments, municipalities tend
more and more to initiate employment and training programs under their own
responsibility besides the Federal Labor Agency. However, critics object
that this might predominantly be viewed as an attempt to shift fiscal
burdens to the Federal Labor Agency rather than a policy option towards
labor market integration of low-wage workers. In order to investigate this
issue, the IWH carried out a country-wide survey within twelve
municipalities and rural districts. The sample comprises 200 employable
welfare recipients, among them participants of labor market programs as well
as a reference group of non-participants. The results of the IWH welfare
survey are at best suggesting a moderate success of program participation
with regard to labor market integration. Nevertheless, the programs appear
to be profitable for municipalities, since they succeed in bringing
participants out of welfare dependency. In many cases, however, welfare is
replaced by unemployment support, which means that only the fiscal
responsibility changes. A shortcoming of the results has to be seen in the
fact that municipalities tend to assign especially those people for program
participation, who are already better fitting into requirements of the labor
market. This seriously impairs the comparability of participants and
non-participants. In view of the remarkable amount of expenditures it seems
therefore advisable to put more attention on the effectiveness of the
programs than has been done in the past. This could be achieved by a
stronger orientation towards an experimental design of assignment for
program participation.
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Business cycle in Germany: Bottom phase almost completed
Wirtschaft im Wandel,
No. 10,
2001
Abstract
In the report, the economic situation in Germany and in the Eurozone in the current year 2001 and in the following year 2002 is analyzed and forecasted in detail. Due to the unfavorable global economic situation and the unexpectedly high inflation, GDP growth has been slowing down in Germany in the year 2001. In 2002, growth will regain momentum. In the remaining course of this year, inflation will abate, thus allowing the European Central Bank leeway for an ease in monetary policy, provided wage increases remain moderate. Due to the cyclically lower revenues and higher expenditures, the public deficit will be temporarily higher than projected in the Stability Program. This should not be counteracted so as not to further endanger economic growth. The main National Accounts data for Germany are summarized in a detailed table in the appendix.
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- Solidarity Pact II -: The responsibilities of the New Länder
Joachim Ragnitz
Wirtschaft im Wandel,
No. 10,
2001
Abstract
In June 2001 the so called "Solidarity Pact II" between the East German States and the Federal Government was set in effect. Federal payments due to the still existing deficit in infrastructure were aggreed upon for the next 20 years. However, as the scope for future payments is limited, public spending has to aim for growth purposes in a more strictly manner than in the past.
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Social Security, Intergovernmental Fiscal Relations and Efficiency: The Case of the Two Systems of Public Assistance for the Unemployed in Germany
Martin T. W. Rosenfeld
Ethics and Social Security Reform. International Studies on Social Security,
2001
Abstract
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Bank Relationships and Firm Profitability
Hans Degryse, Steven Ongena
Financial Management,
No. 1,
2001
Abstract
This paper examines how bank relationships affect firm performance. An empirical implication of recent theoretical models is that firms maintaining multiple bank relationships are less profitable than their single-bank peers. We investigate this empirical implication using a data set containing virtually all Norwegian publicly listed firms for the period 1979-1995. We find that profitability is substantially higher if firms maintain only a single bank relationship. We also find that firms replacing a single bank relationship are on average smaller and younger than firms not replacing a single bank relationship.
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